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WOLFSBURG, Germany--On the back of strong sales turnaround in the U.S. and emerging markets as well as cost-cutting, Volkswagen AG's (VOW.XE) namesake brand slightly raised its profit outlook for the coming three years, citing strong sales of new SUVs and improved profitability.

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The VW brand said Thursday at a news conference that it has raised its outlook for its operating profit margin to 4% to 5% by 2020, slightly higher than its previous guidance for a margin of 4%. The company has already achieved 1.9 billion euros ($2.25 billion) in improved earnings from annual savings from cost-cutting and efficiency measures, putting it on track to meet its target of boosting earnings by EUR3.7 billion by 2020.